Re: nvsound support status
Alsa supports SPDIF output. AFAIK, you can set it through the IEC958 switch in alsamixer.
But, having a board with soundstorm on it, I will say that the nvsound driver gives a better sound quality than ALSA does. However there are still a few problems left with 5.1 sound output and mplayer, which are not completely fixed even in the latest driver.
So, IMHO, if you are using only stereo output, you should get better sound and a good working system if you use nvsound driver.